Justin Welby acknowledged the schools face "particular challenges in this area", after initially raising concerns during an address to the Church of England's General Synod in July 2013.
He has now launched the full report, entitled 'Valuing All God's Children', in Lewisham, south-east London.
The proposals will see school inspectors specifically looking at how effectively church schools are tackling homophobic bullying.
Arun Arora is Head of Communication for the Church of England.
Speaking on Premier's News Hour he says the issue is something the Church strongly felt needed addressing.
However, the new guidelines have drawn some criticism from gay Christian groups.
Reverend Sharon Ferguson is from the Lesbian and Gay Christian Movement.
She told Premier's News Hour she thinks the report is a good start, but believes it fails to demonstrate a fully inclusive attitude towards homosexual students.
The guidance is being sent to all Church of England schools and provides 10 key recommendations as well as sample policies for primary and secondary schools.